Covad Joins Compaq in Broadband Deal

Digital subscriber line (DSL) provider Covad Communications
has agreed to sell it suite of small business services to Compaq Computer . The financial terms of the deal were not disclosed.


The agreement comes at a time when Covad’s main competitor, NorthPoint, is
selling its DSL technology at a much lower price than the California-based
company.


However, in the highly charged competitive DSL landscape, where phone
companies are expected to dominate the foreseeable future, Covad is working
fast to carve out a deeper niche for itself with the small business market. Hence the deal with Houston-based Compaq, which cut 5,000 jobs last month, but has a widely recognized brand among consumers.


In short order, the duo will offer a high-speed broadband connection service
for small shops and Compaq dial-up services for customers without DSL
availability in their area.


In a statement, Bob Brewer, Compaq’s vice president, Internet services and
eCommerce, said the company would offer small business applications,
including customer and financial management tools to provide a “complete
small business IT department without the overhead.”


Last month, Compaq said it would merge its commercial and consumer PC
operations into a single group. The company has been focusing attention on
powerful business computers, storage and devices, as part of its strategy to
maintain margins in the midst of the slowing U.S. economy and a drop in PC
buying.


In part, today’s announcement reflects the company’s determination to
aggressively sketch out a way to increase its share of the overall
information technology market.


And Covad is a sensible broadband connectivity choice for the PC hardware
and software manufacturer.


In March 2000, as a result of its acquisition of LaserLink.net, Covad ramped
up subscriber services, including registration, fulfillment process,
connection and Internet software, network authentication, E-mail, Web
hosting options, subscriber billing and reporting, and customer service and
technical support.


Covad offers DSL, IP and dial-up services through telecommunications
carriers, enterprises, affinity groups, PC OEMs, application service
providers, and Internet service providers that resell Covad DSL to homes and
small businesses.


As telecoms begin closing in, and sewing up the DSL market, deals that
target small segments of the industry may be the soundest strategy to
pursue.

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